Research from the Institute of Fundraising, the Charity Finance Directors’ Group and PricewaterhouseCoopers LLP has shed new light on the impact that the economic downturn is having on charity finances and fundraising. The report of the findings, which surveyed 362 charities, showed that although there was a wide range of experiences the average charity’s income is currently stable. The income from legacies, trusts and corporates has, however, seen a downturn.
According to the report, charities are already taking proactive steps to protect themselves from future instability, with 71% of respondents taking action in light of the current economic climate. Prudent initiatives carried out by charities so far include 32% of charities putting capital projects on hold and 34% of charities planning to restrict IT projects.
In further evidence of good charity management and monitoring, 74% of charities reported that they felt they had adequate budget setting and regular monitoring systems in place. 47% of charities expected to take pre emptive actions ahead of potential increases in costs or reductions in income. Half of the charities which took part in the report have even identified positive advantages of the downturn with 62% of charities expecting to increase their fundraising activities in the coming months, in order to fundraise out of the downturn.
Overall, it is clear that charities are not expecting a growth in income, but they are wary of predicting what the next few years may hold for them. It is as difficult for them as for other organizations to predict what will happen in the near future.
Lindsay Boswell, Chief Executive of the Institute of Fundraising, comments:
”Whilst the credit crunch is a ‘chill wind’ for charities, this report shows that with the right tools, knowledge and support charities can weather the credit crunch, and in some cases it may even provide opportunities for further fundraising. Even in the best of conditions, charity fundraising remains a challenge – and so it is vital for individuals to keep on giving to their favorite good causes.”
Keith Hickey, Chief Executive of the Charity Finance Directors’ Group, says:
“Previous recessions have shown a lag between the start of a recession and the time when the full force of its impacts hits. In this quiet before the storm charity finance directors will need to show real leadership and work proactively to guide charities through the uncertain times ahead.
“Action must be taken now in order to make the most efficient use of available resources, and thus to maximize the support for the beneficiaries who charities exist to help.”
Ian Oakley-Smith, Director, PricewaterhouseCoopers LLP, adds:
“This is a significant piece of research which we hope will provide many charities with useful information as they prepare for the impact of the downturn.”